Credit Repair

Financial Dictionary -> Debt -> Credit Repair

Living in a world marked by the ubiquitous Credit Crunch, in which repair of a consumer's credit history has become a hotly sought after service, we are constantly bombarded by messages offering 'cheap, quick, and effortless' credit history cleanup. Such offers, however, prove almost always - to put it mildly - unrealistic. Credit repair is indeed possible, but the process is by no means easy and speedy. Credit repair requires, before all, an earnest effort on our part, which must always begin with gathering of information about our rights and options in the event of a bad credit report filed against us.

So, what rights do we have if we are reported by a credit bureau as having bad credit? Well, first of all, we are entitled to a new, free report, if we consider some of the initial information incorrect or partial. This new report can be requested from the company which has reported us within sixty days of the first report. Also, one has the right to dispute for free any mistakes or old information which is included in the initial report of the consumer reporting company (i.e. the credit bureau). For this purpose, we should get in touch with the latter, point out the mistakes, and substantiate our claim by submitting copies of the applicable documents. The reporting company should then initiate an investigation and report the results back to us within a period of thirty days. Alternatively, we can directly contact the organisation which has supplied information about us and present our case to the credit bureau. Once again, we should adduce copies of all relevant documents and, if mistakes are detected, the organisation will have to notify the credit bureau about them and retreat the data which was provided the first time.

If the procedure seems as a formidable task to you, it is advisable to turn for help to a credit counselling company. However, you should first research the chosen company thoroughly, making sure that the entity is legally entitled to provide such services, gets good testimonials from its clients, and has clear-set prices (the last bit is of particular importance as credit counselling prices tend to be quite devious and often rather over-the-top).

One last piece of advice: even if the bad credit record cannot be erased, this fact should not discourage you from trying to obtain a loan. The truth is that different creditors set different standards for their customers, and many of them are willing to give credit even to applicants with bad credit history, provided that such persons prove that they have recently improved their credit payment capacity.